Salesforce.com announced it was buying Buddy Media for nearly $700 million on Monday. In any discussion, that’s a lot of money, maybe more than Salesforce has yet spent on any acquisition. What’s going on? As you might expect, I see economics playing an important role here, and I think there are two issues to consider. They may even boil down to one — the cost of acquiring a customer. In an economy that’s treading water and where the primary customer demand is low price, you can’t afford to spend a lot to acquire a customer because there’s no room in the margin for the cost of acquisition.
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CRM in a Faceless World
Posted by: Denis Pombriant June 6, 2012 05:00 AMSalesforce.com announced it was buying Buddy Media for nearly $700 million on Monday. In any discussion, that’s a lot of money, maybe more than Salesforce has yet spent on any acquisition. What’s going on? As you might expect, I see economics playing an important role here, and I think there are two issues to consider. They may even boil down to one — the cost of acquiring a customer. In an economy that’s treading water and where the primary customer demand is low price, you can’t afford to spend a lot to acquire a customer because there’s no room in the margin for the cost of acquisition.